- Venezuela Changes Official Exchange Rate and Incorporates New Items to Currency Exchange Control Regime
- February 18, 2013 | Author: Luis Ernesto Andueza Galeno
- Law Firm: Despacho de Abogados miembros de Norton Rose, S.C. - Caracas Office
Venezuela changes official exchange rate
In Official Gazette N° 40.108 dated February 8, 2013, a new Exchange Agreement N° 14, entered into between the Ministry of the People’s Power for Planning and Finance Matters (the Ministry of Finance) and the Central Bank of Venezuela (BCV), was published.
Exchange Agreement N° 14 establishes a new official exchange rate, in force and effect from February 9, 2013, of Bs. 6.30/US$ for the sale of US dollars (Dollars) by the BCV, and of Bs. 6.2842/US$ for the purchase of Dollars by the BCV.
Special regime on the official exchange rate applicable to the sale of foreign currency to certain sectors or cases
Exchange Agreement N° 14 incorporates a special regime whereby the sale of foreign currency by the BCV corresponding to certain sectors or cases, which comply with certain requirements or fall within certain circumstances included in such agreement, are made based on the preceding official exchange rate of Bs. 4.30/US$ (which is more favorable for the purchasers of Dollars or other foreign currency from the BCV).
We outline below, in a general and non-exhaustive manner, the sectors or cases to which the preceding official exchange rate of Bs. 4.30/US$ applies.
Transactions with an ALD approved by CADIVI, and transactions related to imports conducted through ALADI with a reimbursement code
The sale of foreign currency by the BCV with an authorization for the actual acquisition of foreign currency (autorización de liquidación de divisas or ALD) approved by the Foreign Exchange Administration Commission (CADIVI): (a) which has been delivered by CADIVI to the BCV and received by the latter by February 8, 2013, (b) which is valid and in force and effect by that date, and (c) in respect of which the actual payment has not been requested by the relevant authorized exchange operator to the BCV by that date, are made at the preceding official exchange rate of Bs. 4.30/US$, regardless of the sector in which the purchaser of foreign currency operates, the reason for which the request for foreign currency is based, or the date on which the ALD has been issued.
Likewise, the sale of foreign currency by the BCV related to imports conducted under the Reciprocal Payments and Credits Agreement of the Latin American Integration Association (Asociación Latinoamericana de Integración or ALADI) (the ALADI Agreement): (a) with an authorization to acquire foreign currency (autorización de adquisición de divisas or AAD), and (b) with, as of February 8, 2013, a reimbursement code, are made at the preceding official exchange rate of Bs. 4.30/US$, regardless of the sector in which the purchaser of foreign currency operates or the date on which the AAD has been issued.
Transactions with an AAD approved by CADIVI, transactions related to imports conducted through ALADI without a reimbursement code, and transactions payable under SUCRE
The sale of foreign currency by the BCV with an AAD approved by CADIVI by February 8, 2013, and: (a) with no ALD approved by CADIVI by that date, or with such ALD approved by CADIVI by that date but which has not been delivered by CADIVI to the BCV, in both cases provided that the respective ALD is subsequently granted, or (b) in the case of imports conducted under the ALADI Agreement, without, as of February 8, 2013, a reimbursement code, or (c) related to imports payable under the Treaty for the Creation of the Unified System for the Settlement of Regional Payments (Sistema Unitario de Compensación Regional de Pagos or SUCRE), are made at the preceding official exchange rate of Bs. 4.30/US$, solely for the following reasons:
Imports, based on the relevant customs codes, for the food, health, commerce, press, home appliance, electronics, computer and telecommunications sectors, provided that the AAD has been issued by CADIVI on or after October 15, 2012; and
Imports, based on the relevant customs codes, for the automobile, electricity, construction, chemical, tire and plastics, paper, carton and wood, veterinarian, textile, arts, book and school supplies, services, science and technology, machinery and equipment, metallurgical and non-metallic mineral sectors, provided that the AAD has been issued by CADIVI on or after July 15, 2012.
Transactions related to requests submitted to CADIVI
The sale of foreign currency by the BCV related to requests for the acquisition of foreign currency received by CADIVI by February 8, 2013, in respect of which CADIVI has not yet issued the respective AAD (if any), are made at the preceding official exchange rate of Bs. 4.30/US$, solely for the following reasons:
Reasons independent from the date of receipt of the respective request:
Payments for expenses of students enrolled in academic activities abroad;
Payments for expenses related to health recovery, sports, culture, scientific investigation and other cases of special urgency at the discretion of CADIVI;
Payments to retired people who reside abroad;
Remittances to family members who reside abroad;
Lease and services agreements, and agreements for the use and exploitation of patents, trademarks, licenses and franchises, and imports of intangible goods, regulated by Rule N° 063 of CADIVI, other than those included in the upcoming paragraph (ii) below;
Public service of international air transport of passengers, cargo and mail, duly authorized to operate as such by the National Executive, regulated by Rule N° 023 of CADIVI; and
Transactions typical of the insurance industry, regulated by joint Rule N° 082 of CADIVI and the Office of the Superintendent of the Insurance Activity.
Reasons provided that the respective request has been received on or after July 15, 2012:
Transactions typical of the national civil aeronautics industry, regulated by Rule N° 083 of CADIVI; and
Network lease agreements; installation, repair and maintenance of imported machinery, equipment or software for the telecommunications sector, regulated by Rule N° 063 of CADIVI.
New regime for retaining and managing foreign currency by exporters of goods and services
Under the new Exchange Agreement N° 14, the exporters of goods and services that are part of the private sector can now retain and manage up to 40% of the funds received in foreign currency as a result of the exports conducted by them. The foreign currency so retained and managed must: (a) be used to pay expenses incurred as part of the export activity, other than financial debt, or (b) be transferred to the accounts denominated in foreign currency that those exporters can open and maintain with universal banks organized or domiciled in Venezuela and authorized to operate as such under Venezuelan banking legislation.
Creation of the Superior Entity for the Optimization of the Currency Exchange System
Under Exchange Agreement N° 14 and Decree N° 9.381 of the Executive Vice-President of the Republic, acting by way of delegation from the President of the Republic, published in Official Gazette N°40.108 dated February 8, 2013, the Superior Entity for the Optimization of the Currency Exchange System (the Exchange Superior Entity) is created.
The purpose of the Exchange Superior Entity is to design, plan and execute the strategy of the state on currency exchange matters, in order to achieve maximum transparency and efficiency in connection with the allocation of foreign currency to the economic sectors of the country. In this respect and without limiting the generality of such purpose, the Exchange Superior Entity is competent to prioritize the allocation of foreign currency during the fiscal year, direct the quality and quantity of imports, coordinate the applicability of certificates of lack of national production or of insufficient national production in accordance with the National Plan of Economic and Social Development and the availability of foreign currency, and safeguard the efficiency and proper operation of the Foreign Currency Administration System.
The decisions of the Exchange Superior Entity must be adopted with the consent of the Ministry of Finance and the BCV.
Abrogation of certain previous Exchange Agreements
Exchange Agreement N° 14 abrogates the preceding Exchange Agreement N° 14 published in Official Gazette N° 39.584 dated December 30, 2010; Exchange Agreement N° 15 published in Official Gazette N° 39.603 dated January 27, 2011; and Article 5 of Exchange Agreement N° 12 published in Official Gazette N° 39.485 dated August 11, 2010.